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Really dont want to hijack the OP's thread; however....
I say taken over the process because which AMC does each lender use? How did this AMC get to be a particular lenders choice? As i understand it, every lender decided on their own which AMC to use. Could be the best friend of the bank needed a job so started an AMC, could be a relative that wanted their own business and started an AMC. In my opinion, since each lender decided which AMC must be used, i feel that gives the lender pressure they can apply on the AMC thus they have taken over the process.
Maybe you could shed some light on how each lender chose which AMC has to be used? Apparently you are an appraiser and you could possibly answer many questions as appraisals are not my expertise.
Good question.
In my opinion the HVCC is one of the worst things that could have happen to the consumer.
Like a lot of government regulations the HVCC rule was well intentioned but has had the effect of slowing the process of home buying at a time when the country ought to be doing everything it can to streamline the process AND I believe has directly lead to poor appraisers getting more work for the shoddy appraisals they create with poorly supported prices AT THE VERY POINT IN TIME when lenders need the best appraisers to be able to drive out the appraisers who don't really know how to factor in things that only temporarily effect prices.
Pretty funny that the "solution" that HVCC was supposed to solve was appraisers that were suspected of manufacturing inflated prices by artifically rewarding appraisers that have not demonstrated much skill at all...
Like a lot of government regulations the HVCC rule was well intentioned but has had the effect of slowing the process of home buying at a time when the country ought to be doing everything it can to streamline the process AND I believe has directly lead to poor appraisers getting more work for the shoddy appraisals they create with poorly supported prices AT THE VERY POINT IN TIME when lenders need the best appraisers to be able to drive out the appraisers who don't really know how to factor in things that only temporarily effect prices.
Pretty funny that the "solution" that HVCC was supposed to solve was appraisers that were suspected of manufacturing inflated prices by artifically rewarding appraisers that have not demonstrated much skill at all...
First of all. A typical appraisal report takes me about two hours to complete so it's unusual for any appraisal to take more than a day or two after inspection to get to the lender. I'm not saying it doesn't happen, just saying it's not typical. In fact most of my clients require the report 24 hours after inspection. That's basically the industry standard.
Second, I'm not saying the HVCC is perfect but it certainly succeeded in getting the lenders off the backs of appraisers. Some of you may disagree but I think the HVCC is great for the consumer because they are more likely to get an appraisal which contains no bias. Lender pressure and inflated appraisals have a lot to do with the current housing crisis. Show me 10 people in foreclosure and I'll show you at least 1 dishonest lender and one dishonest appraiser. I'm not saying that the bad lenders carry all the blame but appraisers don't inflate home values unless they are pressured to do so.
As for appraisal management companies, they didn't just pop up over night because of the HVCC legislation. They've been around for decades and a majority of lenders were using them well before the HVCC came along.
As for delays in getting appraisal reports via an AMC? Not happening for the most part. My AMC clients are very streamlined in that respect and everything is transmitted electronically. I've sent appraisals in and gotten correction requests in as little as 30 minutes. Not all AMC's are equal but the slow ones won't stay in business very long if the lender isn't getting reports in a timely manner. I can say FOR CERTAIN that appraisals spend much more time hung up in underwriting than they do in the hands of an AMC.
As for banks choosing AMC's? I don't know nor do I care how they choose an AMC. It doesn't matter as far as appraisals are concerned because the lender is seperated from the appraiser regardless of which AMC they use. Since the lender can't influence the value, they'll likely choose an AMC that produces quick appraisal reports that sail through underwriting with little or no problems. Keep in mind that well over 90% or mortgages are sold by the lender and an appraisal that doesn't meet Fannie Mae, Freddie Mac, FHA or VA guidelines is useless in most mortgage transactions. That is what will determine which AMC a lender will use.
First of all. A typical appraisal report takes me about two hours to complete so it's unusual for any appraisal to take more than a day or two after inspection to get to the lender. I'm not saying it doesn't happen, just saying it's not typical. In fact most of my clients require the report 24 hours after inspection. That's basically the industry standard.
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Actually, it may be for some, but I challenge anybody to produce a well written, well researched, USPAP compliant report within 24 hours of inspection. Any lender/AMC requiring that type of turnaround time will never be on my list of clients.
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Second, I'm not saying the HVCC is perfect but it certainly succeeded in getting the lenders off the backs of appraisers. Some of you may disagree but I think the HVCC is great for the consumer because they are more likely to get an appraisal which contains no bias. Lender pressure and inflated appraisals have a lot to do with the current housing crisis. Show me 10 people in foreclosure and I'll show you at least 1 dishonest lender and one dishonest appraiser. I'm not saying that the bad lenders carry all the blame but appraisers don't inflate home values unless they are pressured to do so
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I have heard this argument ad nauseum. But guess what? All we as appraisers have to do is say NO. And please don't think for a minute that AMCs don't use pressure. And for reasons why the HVCC is bad for consumers, see below.
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As for banks choosing AMC's? I don't know nor do I care how they choose an AMC. It doesn't matter as far as appraisals are concerned because the lender is seperated from the appraiser regardless of which AMC they use. Since the lender can't influence the value, they'll likely choose an AMC that produces quick appraisal reports that sail through underwriting with little or no problems. Keep in mind that well over 90% or mortgages are sold by the lender and an appraisal that doesn't meet Fannie Mae, Freddie Mac, FHA or VA guidelines is useless in most mortgage transactions. That is what will determine which AMC a lender will use
You do realize that some lenders use AMCs that they OWN, don't you? So there is no "arms length" there.
Many lenders will choose an AMC based on price, with the result that the AMC will pay rock bottom fees to an appraiser for an assignment who, in many cases, comes from far away and has not geographical competence, which is a USPAP violation.
Or they hire an urban appraiser for a $200 rural appraisal.
Based on the reviews I have done lately I can tell you that the HVCC is bad for consumers.
Actually, it may be for some, but I challenge anybody to produce a well written, well researched, USPAP compliant report within 24 hours of inspection. Any lender/AMC requiring that type of turnaround time will never be on my list of clients.
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I have heard this argument ad nauseum. But guess what? All we as appraisers have to do is say NO. And please don't think for a minute that AMCs don't use pressure. And for reasons why the HVCC is bad for consumers, see below.
You do realize that some lenders use AMCs that they OWN, don't you? So there is no "arms length" there.
Many lenders will choose an AMC based on price, with the result that the AMC will pay rock bottom fees to an appraiser for an assignment who, in many cases, comes from far away and has not geographical competence, which is a USPAP violation.
Or they hire an urban appraiser for a $200 rural appraisal.
Based on the reviews I have done lately I can tell you that the HVCC is bad for consumers.
I agree with you 100%. HVCC is horrible for the consumer. Takes away choice which drives up price. Plus, appraisers have to split the fee with a management company so they are now making in most cases half what they used to.
Since they are making less it benefits the appraiser to do quick reports so they can get another order.
We'll just have to strike it up as a difference of opinion. I don't do appraisals for $200 (we charge $350 for a URAR), I don't get pressure from my AMC clients and I don't have any problem producing a credible and accurate URAR in about two hours. In fact a typical appraisal in my area (coastal region of NC) goes out with 5 comps (4 closed sales and a current listing) as well as the new marketing conditions form.
And of course the best part of the HVCC law is the lack of lenders calling my office and whining about how their loan won't close unless the property appraises for (insert value here).
We'll just have to strike it up as a difference of opinion. I don't do appraisals for $200 (we charge $350 for a URAR), I don't get pressure from my AMC clients and I don't have any problem producing a credible and accurate URAR in about two hours. In fact a typical appraisal in my area (coastal region of NC) goes out with 5 comps (4 closed sales and a current listing) as well as the new marketing conditions form.
And of course the best part of the HVCC law is the lack of lenders calling my office and whining about how their loan won't close unless the property appraises for (insert value here).
We will have to disagree. However, I am pleased to find out you get a decent fee for the work you do. I am curious, what does the AMC charge the client for the appraisal. Would love to see how much they are getting for basically doing nothing as the appraiser does all the work.
I have spoken with other appraisers who have told me they are forced to take much lower fees to do an appraisal. It is either take what they offer or no appraisal order.
Yea that's absolutely true. Obviously I talk with other appraisers in my area and some of them accept assignments with fees that are just insulting. Luckily, the company I work for simply turns down work from AMC's that don't want to pay our fee. I think the industry as a whole would be better off if all appraisers did that but some people are willing to work for less. When the HVCC hit, we picked up about 3 or 4 new AMC clients but we probably declined work from about that many too. The bigger banks are using respectable fee paying AMC's for the most part and I think that will continue. In the grand scheme of a mortgage transaction, I think most lenders are willing to pay $400 to $500 for a quality appraisal which is (what I imagine) is what most of my AMC's clients are charging.
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